The smartphone market has crossed another threshold, shipping 1 billion units in a single year for the first time in history. That’s according to market research firm IDC’s Quarterly Mobile Phone Tracker.

The firm reports vendors shipped slightly more than 1 billion smartphones worldwide, up 38.4 percent from the 725.3 million units in 2012. IDC had predicted this figure in a previous report.

"The sheer volume and strong growth attest to the smartphone's continued popularity in 2013," said Ramon Llamas, Research Manager with IDC's Mobile Phone team. "Total smartphone shipments reached 494.4 million units worldwide in 2011, and doubling that volume in just two years demonstrates strong end-user demand and vendor strategies to highlight smartphones."

Smartphones Dominating

Smartphones accounted for 55.1 percent of all phone shipments in 2013, up from the 41.7 percent in 2012. In the fourth quarter of 2013, vendors shipped of 284.4 million smartphones worldwide, up 24.2 percent from the 229.0 million units shipped in the year-ago period.

In the worldwide mobile phone market (inclusive of smartphones), vendors shipped 1,821.8 million units, up 4.8 percent from the 1,738.1 million units shipped 2012. In the fourth quarter of 2013 alone, vendors shipped a total of 488.4 million units worldwide, up 0.9 percent from the 484.0 million units shipped in fourth quarter of 2012. This is 2.8 percent lower than the 502.4 million units that IDC had recently forecast.

"Among the top trends driving smartphone growth are large screen devices and low cost," said Ryan Reith, Program Director with IDC's Worldwide Quarterly Mobile Phone Tracker. "Of the two, I have to say that low cost is the key difference maker. Cheap devices are not the attractive segment that normally grabs headlines, but IDC data shows this is the portion of the market that is driving volume. Markets like China and India are quickly moving toward a point where sub-$150 smartphones are the majority of shipments, bringing a solid computing experience to the hands of many.”

Reviewing the vendors, Samsung is the clear leader worldwide. Apple posted record shipment volume during the fourth quarter, driven primarily by the addition of multiple countries offering the iPhone 5S and 5C, and sustained demand from its initial markets that saw these models launch at the end of the third quarter.

Huawei is still in third place. Lenovo, despite having no presence in North America nor Western Europe, finished the quarter in the number four position. And LG finished just behind Lenovo and edged out ZTE for the number five position, with just five million units separating the two companies.

Smartphone Limitations

We caught up with Michael Disabato, managing vice president of Network and Telecom at Gartner, to get his take on the smartphone market passing the 1 billion shipped mark. He told us it demonstrates that the manufacturing infrastructure has ramped up to the point where vendors deliver high volumes with high quality.

“You don’t hear about massive recalls of broken phones or phones that are exploding. Occasionally you hear that there’s a battery problem or there’s a software bug,” Disabato said. “So the cycle of concept through engineering through prototype through production is relatively stable.”

Disabato said the milestone also demonstrates consumer preference for smartphones over feature phones. Little by little, he said, feature phone are declining but he doesn’t believe these devices will disappear completely from the landscape.

“Smartphones are more expensive than feature phones to make,” Disabato said. “The data plans are expensive to use. Until we get to the point where carriers realize they have to get rid of roaming charges globally it’s going to be limited in usefulness for people who travel.”